The Idea in Brief
Tempted to jump on the one-to-one marketing bandwagon? It’s no surprise: One-to-one marketing (a.k.a. customer-relationship marketing, or CRM) has huge potential to help you learn more about customers, tailor your offerings to their needs—and win their undying loyalty.
But implementing one-to-one is surprisingly complex. Worse, too many companies use it to badger customers with excessive telemarketing and direct-mail campaigns.
How to reap the benefits of one-to-one marketing—and avoid the pitfalls? Preparation is key. Before jumping, learn the complexities and assess your firm’s readiness. Then set priorities based on your own situation and resources.
The Idea in Practice
To decide whether to implement a one-to-one marketing program and how to do it:
1. Differentiate The Stages
Implementation entails four overlapping stages —“identify,” “differentiate,” “interact,” and “customize”—that become increasingly complicated and beneficial. They fall into two categories:
Analyze:
- Identify end-user customers in detail—particularly their habits and preferences.
- Differentiate them based on their value to you and their own needs. You’ll gain the greatest advantage from the most valuable customers.
Take action:
- Interact with customers through affordable channels that yield more information about their value and needs (e.g., provide help on-line rather than through expensive call centers).
- Customize products and services based on what you’ve learned.
2. Assess Your Situation
Is your company ready to launch a one-to-one initiative? Find out by using two questionnaires, filled out by managers, employees, and customers:
- “The Broad View” questionnaire rates the company’s readiness on the four stages.
Example:
Responses to Question 4—“How well does your company customize its products based on what it knows about its customers?”—range from “We provide standard products” to “We help customers specify their needs, propose a particular product configuration, and remember it the next time we deal with that customer.”
- “The One-to-One Gap” questionnaire rates the company culturally and organizationally based on customer-centric criteria including technology and customer relationships.
Example:
Responses to Question 17—“How effectively does the company build individualized marketing programs?”—range from “We build all marketing programs to reach a mass market” to “We build all marketing programs to be specific to each customer’s needs.”
3. Set Priorities
Based on insights from the two questionnaires, select stages to focus on. Example:
Bookstore customers’ needs vary, suggesting a need for customization. However, because bookstore customers all have similar value, it’s not cost-efficient to remember individual preferences and alert customers when favorites publish new books. This suggests sharpening focus on inexpensive interaction; e.g., an Amazon.com-like Web site that remembers all customers’ preferences.
4. Implement
For each of the four stages, the authors offer numerous implementation suggestions. A few examples:
- Identify: Ask customers one or two questions every time you’re in touch with them.
- Differentiate: Look for last year’s large customers who’ve ordered half as much this year. Visit them now—before your competition does.
- Interact: Initiate more dialogue. Call every valuable customer you lost in the last year and give them a reason to return.
- Customize: Use regional and subject-specific catalog editions.
Practiced correctly, one-to-one marketing can increase the value of your customer base. The idea is simple: one-to-one marketing (also called relationship marketing or customer-relationship management) means being willing and able to change your behavior toward an individual customer based on what the customer tells you and what else you know about that customer. Unfortunately, too many companies have jumped on the one-to-one bandwagon without proper preparation. The mechanics of implementation are complex. It’s one thing to train a sales staff to be warm and attentive; it’s quite another to identify, track, and interact with an individual customer and then reconfigure your product or service to meet that customer’s needs.
